Ninth Circuit Pretty Much Kills Most Attorneys' Fees Awards to Employers

In a case where the court readily acknowledged that the plaintiff's claims were frivolous, the court invented a whole new standard for awarding attorney's fees.  The fees statute says the "prevailing party" is entitled to "reasonable attorney's fees."  Then the courts said that employers can recover fees only if the plaintiff's claims are frivolous. 

In this case, Harris v. Maricopa County Superior Court, the court of appeals decided if the plaintiff asserts multiple claims, the defendant can recover fees only on the amount of time spent exclusively on frivolous claims.  So, let's say  the defense counsel spends time that overlaps on frivolous and non-frivolous claims - the attorneys' fees cannot be recovered at all.

In essence, they might as well have said, "if there are multiple claims, unless they are all 100% frivolous, the defendant shouldn't even bother trying for attorney's fees."  Instead, the court hides its true intention by setting a new standard ensuring it's impossible to recover fees, without really saying so. Judge Stephen Reinhardt, who has never met a plaintiff he didn't like, laughed at employers like this:

Although the court may not have erred in determining that the claim was frivolous, it nonetheless erred in awarding substantial fees to defendants on this claim. Almost every time entry in defendants’ fee petition for work related to the hostile work environment claim was also listed as related to some or all of Harris’s nonfrivolous discrimination claims. As we have already explained, in a civil rights action with multiple claims, only some of which are groundless, a defendant is entitled only to those fees attributable exclusively to defending against plaintiff’s frivolous claims. If the work is performed in whole or in part in connection with defending against any of plaintiff’s claims for which fees may not be awarded, such work may not be included in calculating a fee award. Accordingly, the fees properly attributable to this claim, if any, would be quite minimal.

The court's rationale is that the law is "solicitous" of plaintiffs' complaints in civil rights cases.  The court more accurately is "solicitous" of bad faith lawsuits with no chance of succeeding.  It is not mutually exclusive to allow plaintiffs with bona fide claims to have a day in court, while still enforcing some minimal standards.  If a case is frivolous, that means it never should have been brought. It is only fair to defray some of the employers' costs in defending against a lawsuit that never should have been filed in the first place.

Oh, I'm not the only one who smacked his forehead after reading the opinion in this case. There was a dissent that pretty much calls bull on the majority.  Perhaps the full en banc court will take up this issue.

The opinion is Harris v. Maricopa County Superior Court and the opinion is here.

DGV

Court of Appeal: No Attorney-Client Privilege for Employee's Emails to Lawyer

Gina Holmes worked for Petrovich Development Co. LLC as assistant to the CEO, Paul Petrovich.  She was pregnant early in her employment and got into a discussion with her boss about the length of her leave and their respective feelings about her pregnancy. Although it appeared that they had cleared the air, Holmes simultaneously attempted to hire a lawyer, via email at work. Apparently, Holmes became upset that Petrovich forwarded her emails to others in the organization and quit, claiming constructive discharge, discrimination, harassment, etc.

The trial court summarily dismissed the harassment, discrimination and retaliation claims. The court of appeal affirmed - holding that the harassment evidence was limited to email correspondence that was neither severe nor pervasive.

The court of appeal also affirmed dismissal of the claim that Holmes was forced to resign. The court noted that when a plaintiff cannot establish a hostile work environment, a constructive discharge claim is a higher standard and must also fail.  Holmes' retaliation claim failed too, because of the lack of an adverse action.

That left claims for intentional infliction of emotional distress and invasion of privacy, which were tried to a jury. The jury found for the defendants. On appeal, Holmes claimed the trial court should not have allowed Petrovich to use the emails she sent to a lawyer seeking a referral, in which she explained her situation.  The trial court held that Holmes waived the privilege because she used company email, and there were clear policies explaining the company's right to monitor email.

The court of appeal agreed that Holmes waived the privilege Here is the money quote:

Although a communication between persons in an attorney-client relationship "does not lose its privileged character for the sole reason that it is communicated by electronic means or because persons involved in the delivery, facilitation, or storage of electronic communication may have access to the content of the communication" (§ 917, subd. (b)), this does not mean that an electronic communication is privileged (1) when the electronic means used belongs to the defendant; (2) the defendant has advised the plaintiff that communications using electronic means are not private, may be monitored, and may be used only for business purposes; and (3) the plaintiff is aware of and agrees to these conditions. A communication under these circumstances is not a “„confidential communication between client and lawyer‟” within the meaning of section 952 because it is not transmitted “by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation . . . .” (Ibid.)


When Holmes e-mailed her attorney, she did not use her home computer to which some unknown persons involved in the delivery, facilitation, or storage may have access. Had she done so, that would have been a privileged communication unless Holmes allowed others to have access to her e-mails and disclosed their content. Instead, she used defendants‟ computer, after being expressly advised this was a means that was not private and was accessible by Petrovich, the very person about whom Holmes contacted her lawyer and whom Holmes sued. This is akin to consulting her attorney in one of defendants‟ conference rooms, in a loud voice, with the door open, yet unreasonably expecting that the conversation overheard by Petrovich would be privileged.

Lawyers for employees obviously should take note and advise employees not to use monitored email systems. Employers should ensure their email policies are comprehensive and clear regarding employees' expectations of privacy.

The case is Holmes v. Petrovich Development Company LLC and the opinion is here.